Against the panic atmosphere spreading among players and mills, China's domestic long products prices dropped sharply in the past week. Since the growing inventory levels have increased pressure for the market, the long products prices are expected to go further down in the future.
Product name | Specification | Category | Average price (RMB/mt) | Price ($/mt) | Weekly change (RMB/mt) |
20 mm | HRB 335 | 4,250 | 622 | -400 | |
20 mm | HRB 400 | 4,400 | 644 | -380 | |
Wire rod | 6.5 mm | Q235 | 4,110 | 602 | -430 |
Over the past week, China's domestic long products prices posted an overall sharp slide, with decreases ranged from RMB 500/mt to RMB 200/mt seen in various regional markets. In face of the rapid price fall, market players looked quite panic, leading to the bearish commercial activities.
In eastern China, market prices have moved down by margins of RMB 250-500/mt, with rebar prices in the Shanghai market down to the level of RMB 3,900/mt. Meanwhile, affected by the typhoon, the Hangzhou market also registered a sharp decrease and then became gradually stable during the end of the week.
In Beijing and Tianjin, a continuous slip was recorded in market prices in the past week. Coming up to the end of the week, although the market prices stopped decrease and became stable on the surface, traders have lowered their prices in secret. Moreover, due to the remarkable shrinkage in trading volume of some large traders, panic mood has spread over the market.
Following the slump in the Shanghai and Beijing markets, long products prices in southern China also registered a sharp fall, with the mainstream prices generally down by RMB 250-400/mt against the background of the sluggish trading activity. Currently, Chinese leading mills haven't announced any adjustment to their ex-factory prices yet, thus ex-factory prices are remarkably higher than the market prices and inventory levels at mills have climbed to a certain extent.
In the past week, long products inventory jumped up considerably, with the rebar inventory up by 226,770 mt week on week to 3.72226 million mt and wire rod inventory up by 96,090 mt to 1.08283 million mt.
On the raw material side, with most players standing aside, the domestic pig iron market went quite weak over the past week. Meanwhile, the scrap market registered an overall decrease of RMB 80-200/mt; while billet market also moved on a downward trend, with confusions over market quotations.
On the whole, the Chinese long products market has entered the declining phase and is expected to continue the downward movement in a relatively long period of time.